Pampling: Putting money to work

Rob Pampling’s favorite subject in school was economics, and he says a mix of experience in the IT sector and finance gave him the skills to excel in forex trading. Pampling, who is based in Perth, Australia, is the director of Wealth Builder FX, a Hong-Kong registered forex fund that has returned 57.08% year to date for 2009.

In 1985, at age 25, Pampling landed a job as a stock broker with Eyres Reed MacIntosh, part of the MacIntosh stock broking firm. As a licensed financial advisor, he was responsible for 50% of MacIntosh’s total financial planning business in Western Australia. Throughout his career he also provided financial services to accounting firms including Arthur Anderson and Coopers & Lybrand. He started trading currencies on margin in 2002. “[I] absolutely love it. The ability to increase the bank by so much while risking so little really appeals to me,” he says.

Pampling says one of the key drivers of his interest in trading has been “the prospect of getting money to work for you rather than you working for money.”

“The thing about trading forex is that it acts as a kind of insurance for one’s portfolio if managed correctly. No matter what the market is doing, we can usually make consistently good returns and compensate for other areas of a portfolio that may not be performing so well,” he says.

Wealth Builder FX trades the major currency pairs (U.S. dollar, Eurodollar, pound, Swiss Franc, yen, Australian dollar and Canadian dollar) through an institutional platform with their Swiss broker ACM. “We will trade client funds on their behalf to produce above average returns. It’s a very simple business model,” Pampling says. He looks for high probability trades that have a better chance of making a significant profit. Capital preservation while trading is a key philosophy. “We’ll only put at risk a maximum of 1% of the account value. We will take the profit out of the market every time we see it. So we are reasonably short term in our trading style. We’ve found that banking the profits on a daily basis and compounding those into the next trade provides significant yields over time. We are very particular about which trades we enter and actively look for high probability setups,” he says.

He considers price trend and direction on the daily and four-hour charts and picks his entries based on pivot points and Fibonacci studies on the one-hour and 15-minute charts and uses MACD and Stochastics as confirming tools.

One of Pampling’s best trades wasn’t one that produced the most money. He placed a EUR/USD buy order along with a stop/loss and profit target limit order. “Price retraced and filled my order and then went in my direction immediately. There was no drawdown at all - it just went straight into profit. Price went up to my targeted take profit number and I was out with a nice profit. Then price came back off. So it did exactly what I wanted it to do and best of all I managed to capture the entire move to the last pip. If I was playing golf, it would have been my hole in one,” he says.

For Pampling, trading is “about mastering a skill and achieving something that only a few seem to be able to achieve,” he says. “Trading keeps my mind active. There is so much to consider and learn about in the fundamentals of economics, movement in interest rates and technical analysis. Bringing it all together to consistently make a profit is exciting.”